Automotive Weekly
WHAT THE US AND CANADIAN INTEREST RATE HIKE MEANS FOR CAR BUYERS
Amid the other challenges would-be car buyers are facing right now, expect it to soon become more expensive to finance a vehicle. That's one takeaway from the Federal Reserve's announcement Wednesday that it is raising its benchmark interest rate half a percentage point, and expects to raise it further in June and July. Although auto finance rates aren't based directly on the Fed's benchmark rate, experts told The Detroit News the rate hikes nonetheless are expected to make car loans more expensive. That, in turn, will further squeeze lower- and middle-income buyers already facing affordability challenges amid auto production challenges that have depressed inventory levels and sent prices skyrocketing over the last two years.
Source: The Detroit News
EV CHARGERS EMERGE AS TARGETS FOR HACKERS
As electric vehicle sales pick up steam worldwide, EV charging stations are emerging as an enticing target for hackers. Chargers provide a new opportunity for "hackers looking for ways to make money," warns Yoav Levy, CEO of Upstream Security, an Israeli provider of automotive cybersecurity platforms. "On one hand, chargers are connected to the grid, and on the other hand, they're connected to your car," Levy said. High-profile incidents of hacked charging stations around the world have spotlighted the vulnerabilities.
Source: Automotive News
TESLA IS CRUSHING MORE THAN JUST THE EV MARKET
The Tesla Model 3 is by no means the newest electric sedan on the market, but it's still crushing its competition. Nearly five years after the Model 3 debuted, its popularity only appears to be growing, as Tesla has officially opened two new plants in just the past two months aimed mostly at Model 3 and Model Y production.
That's a trajectory that no other EV maker can currently point to, especially for a sedan that will be half a decade old this July.
What's even more astonishing is that despite the appearance of multiple EVs in several segments over the past few years from other automakers, Tesla still commands over 70% of the EV market stateside. That's a trend that should certainly worry Tesla's competitors, as they work through the chip shortage and other disruptions still affecting the auto industry
This week we took a close look at estimates of Tesla sales, and compared them to sales of gas-engined cars in the same segments, using data from Kelley Blue Book and from Tesla itself.
The results may surprise you, but they should absolutely terrify other automakers, even looking at data from the first quarter of this year. Let's just say that the Model 3's gas-engined competitors are so far behind that the chip shortage and other production-related snafus can't account for their lukewarm level of sales. The situation with the Model Y is equally troubling... for automakers with vehicles trying to compete with it.
In the sedan market, first quarter of 2022
- Tesla Model 3 – 46,707
- Lexus ES – 10,051 (throw in Lexus IS numbers and you get 14,513)
- BMW 3-Series – 8156
- Cadillac CT4/CT5 – 5236
- Audi A4 – 3597
- Acura TLX – 2991
In the luxury SUV market, first quarter of 2022
- Tesla Model Y – 71,358
- Lexus RX – 26,795
- BMW X5 – 16,477
- Mercedes GLE – 13,028
- Audi Q5 – 10,368
- Acura RDX – 7878
- Lincoln Corsair – 6944
With more than 125,000 US deliveries in the first quarter, Tesla outsold BMW, Mercedes, and Lexus by at least 50,000 units. That means Tesla crushed brands that sell in even lower volume: Audi, Cadillac, Chrysler, Dodge, Land Rover, Lincoln, Mazda, and Volkswagen. Tesla nearly outsold Subaru and was less than 10,000 units from reaching Ram. We're talking about all vehicles sold by these brands—not just a smattering of battery-electrics. At what point will rabid demand for Teslas level off?
Source: Autoweek
APRIL AUTO SALES FALL ON SHORTAGES; HONDA AT 3-DAY SUPPLY
Dealers learned fairly early in the pandemic how to sell cars they didn't have. What's proving tougher, though — judging from April's U.S. auto sales, at least — is trying to sell vehicles they might never get. Lack of inventory remained the driving issue behind April's double-digit sales declines for five of the seven reporting automakers, including a drop of more than 40 percent for American Honda. Mazda North America had the smallest decline, at 3.3 percent. Collectively, reporting automakers' U.S. sales fell more than 21 percent from a year earlier, according to the Automotive News Research & Data Center. Analysts from LMC Automotive estimated that industry volume plunged 17 percent overall.
Source: Automotive News
CHIPS AND COVID IMPACTS
Some Ford, Stellantis Plants Down This Week Due to Chip Constraints
The global semiconductor chip shortage, now in its second year, continues to curtail automotive production. Both Ford Motor Co. and Stellantis NV are taking downtime at some of their plants in North America this week due to chip-related supply constraints. Ford Motor Co. said Monday that its Louisville Assembly Plant in Kentucky, which builds the Ford Escape and Lincoln Corsair, as well as its Oakville Assembly Plant in Ontario, which builds the Ford Edge and Lincoln Nautilus, are down this week.
Source: The Detroit News
Toyota to Slash Production Plan, Suspend Some Domestic Operation Due to COVID Lockdown in China
Toyota Motor Corp said on Tuesday it would suspend operations on 14 lines at eight domestic factories for up to six days in May due to the COVID lockdown in China. It also slashed global production target for the month by 50,000 to 700,000. It did not provide an estimate for lost production in a statement.
Source: Reuters
BMW Delivers Cars Without Apple CarPlay and Android Auto
The chip shortage has claimed another casualty as far as modern car features go. This time, the shortage is leaving owners of some brand-new BMW models without Apple CarPlay and Android Auto. Well, at least, temporarily. The Bavarian carmaker has asked new customers to wait until it can push an over-the-air update that will eventually enable the smartphone interface. The delay is due to BMW switching to a new chip supplier, which has hardware ready to go but not the software needed to run the smartphone integration.
Source: Jalopnik
Nissan Warns of Flat Profit As Chip Shortage Becomes 'New Normal'
Nissan Motor Co expects flat operating profit this fiscal year, far below analysts' expectations, as Japan's third-biggest carmaker grapples with a global chip shortage, rising material costs and China's COVID restrictions. Nissan joins a growing list of global companies warning about declining profitability as they cannot fully pass on soaring input costs to consumers and are bracing for more supply chain hold-ups following the Ukraine conflict and prolonged COVID lockdowns in China.
Source: Reuters
A WATERSHED MOMENT FOR ELECTRIC VEHICLES, COURTESY OF FORD
Ford's F-150 Lightning — which is just hitting the market — is more than simply another pickup truck: It's poised to open the floodgates for electric vehicle adoption in the U.S. by showing how much an EV can do. While Tesla started the EV revolution, Ford will likely get credit for taking these vehicles mainstream. Priced just under $40,000, the F-150 Lightning is a versatile and affordable gateway product that can (sometimes) be charged in under an hour. Ford is overhauling its F-Series pickup truck — America's best-selling vehicle — by ripping out the engine and transmission and replacing it with an electric powertrain.
Source: Axios
GM AND RED HAT TO EXPAND, ACCELERATE VEHICLE SOFTWARE CAPABILITY
General Motors said it has partnered with open-source provider Red Hat to expand the capability of its upcoming Ultifi in-vehicle customer experience platform. Working with Red Hat will be critical to advancing GM's software after Ultifi launches next year, Scott Miller, GM vice president of software-defined vehicle and operating system, said in a joint GM-Red Hat statement Tuesday. Ultifi will enable applications from GM, suppliers and third-party developers.
Source: Automotive News
EV REGISTRATIONS AND TRANSACTION PRICES SOAR
Despite semiconductor shortages, rising transaction prices and falling light-vehicle sales overall, battery-electric vehicle volumes are surging across the U.S.... EV registrations rose 60 percent in the first quarter to 158,689 and took a record 4.6 percent share of the light-vehicle total, according to financial data firm Experian. While total vehicle registrations fell 18 percent in the January-March period to 3.4 million on inventory constraints, a growing stable of electric models attracted early adopters in record numbers.
Source: Automotive News
BMW - NEW EVS TO MATCH INTERNAL COMBUSTION-ENGINE CARS ON PROFIT
BMW cars underpinned by the company's Neue Klasse (New Class) electric platform will be "as profitable as vehicles with state-of-the-art combustion engines," CEO Oliver Zipse said. The Neue Klasse platform will have a new battery chemistry and new cell formats to increase power output, Zipse said at the automaker's annual shareholder meeting on Wednesday.
Source: Automotive News
WELLS FARGO DOUBLE DOWNGRADES FORD AND GM
Says 2022 Could Be 'Peak Profits' For Legacy Automakers
It's time to throw some cold water on Detroit's transition to electric vehicles, according to Wells Fargo. Analyst Colin Langan double downgraded Ford and General Motors to underweight from overweight, saying in a pair of notes to clients on Wednesday afternoon that the shift toward electric vehicles would take a big bite out of the profits for legacy automakers even as they make their own next-generation cars.
Source: CNBC
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